Our Elder Law Care Team will often hear our clients and the folks at our educational estate planing and elder law workshops confuse the words “Medicaid” and “Medicare.” The words look alike and sound alike but the meaning and benefits of these two government programs are much different and it is in your best interest to know the difference. Read on because you will learn a lot.
Both Medicare and Medicaid were started in 1965 under Lyndon B. Johnson’s administration in response to the inability of older and low-income people to purchase private insurance. Medicaid is an assistance program, funded federally and at the state level, that provides coverage for health care to low-income individuals regardless of age. Medicaid is the “long term care” benefit that could pay for your nursing home care should you or your spouse become completely incapacitated. It is governed federally with each state administering its own plan, which can vary from one state to the next. Massachusetts medicaid program is referred to as Masshealth. Medicare is a federal insurance program that provides health coverage for people aged 65 and over or to those under age 65 with a severe disability such as end-stage renal disease or Lou Gehrig’s disease. Medicare does not pay for long term nursing home care but may pay for short term acute care such as rehabilitation after a hospital stay. Medicare often covers you only up to about 90 days of “short term care” and not long term care in the nursing home.
Medicaid eligibility is needs-based, meaning both income and assets are counted when determining eligibility. Both Medicare and Medicaid will cover a broad range of health care services, including hospital stays and physician office visits, yet Medicaid will cover nursing home care, sometimes in-home care services, long term care, and transportation to receive medical care which Medicare will not pay for. It is possible to qualify for dual coverage, which means both Medicare and Medicaid will work together to provide health care coverage and lower costs.
Regarding cost, Medicaid in most instances is free of cost though a small copay may be required depending on the plan. Medicaid can also recover against assets in a recipient’s estate after the death of the recipient. This could mean a lien is placed and executed on a recipient’s home, depending on whether a surviving spouse or blind or disabled child is residing in the home. This is what most of our clients 65 and over are gravely concerned about, losing the family home if either them or their spouse became completely incapacitated in a nursing home. Medicare is not free in that premiums and co-payments may be required for some parts of Medicare, and may be larger for those with a higher income, but eligibility is not income-based.
With Medicare, one has to work for about 10 years (40 qualifying quarters), at which point no premiums are required for Part A, which covers hospitalizations. Premiums may be necessary if you sign up for a Medicare Advantage plan, which is different from Original Medicare where you are permitted to purchase supplemental coverage for out of pocket costs. Because Medicare is not administered by each state, a Medicare recipient will usually have the same coverage and pay the same copays and deductibles regardless of the state of residence. Co-pays and deductibles are required for Medicare’s Part B (outpatient services) and Part D (medication) plans. Also, a financial penalty can be assessed if one does not sign up for Medicare Part B when you first become eligible, and there may be a delay in getting coverage.
Though basic differences are covered here, there is much more information to know regarding both plans, so research is encouraged before you hit the age of eligibility for Medicare to determine which Medicare plan may be right for you. Medicaid plans and coverage differ from state to state, and sometimes county to county. Medicaid benefits are not automatic you need to qualify for them and the process can be daunting.
If you have a loved one that is incapacitated and in a nursing home or in need of nursing home level care it can cost as much as $15,000.00 per month private pay. The average stay in the nursing home is about three (3) years. That can be as much as $540,000.00 in private pay or possibly your life time savings, retirement or family home paying for the care. We may be able to help you qualify for medicaid long term care benefits and protect your family home from the nursing home.
To learn more attend our next free educational estate planning and elder law workshop because you will learn a lot. Contact our friendly elder law team at 781-871-7526 or contact pat@elderlawcare.com to register for the next workshop because we fill up quickly and seating is limited.
Patrick J. Kelleher is an Estate Planning & Elder Law attorney and founder of the elder law care learning center in Hanover Massachusetts. Patrick has been teaching free educational workshops for over 10 years at his learning center and surrounding communities. Learn more at elderlawcare.com or follow Patrick Kelleher on Facebook because you will learn a lot! Offices in Hanover and Quincy.
